EEM Chart Note: Emerging Markets Breaking Out

See It Market

Dec. 12, 2012, 1:12 AM

By Brad Tompkins It has been a month since we last visited the iShares MSCI Emerging Markets (EEM) chart (previous article) just as it broke lower to retest the 200 day Exponential Moving Average (EMA). As it turned out, it was a short-lived breakdown that coiled enough energy to propel the index on an impressive jump higher. In fact, the momentum from the move has pushed the index above the top of a 3 month range (breakout!).

There will likely be considerable resistance at the $44.00 level corresponding to the Feb intermediate high and the bottom of a 9 month range from Oct 2010 to July 2011. Given the size of the recent run and nearby resistance it may be wise to wait for a pullback for a better risk/reward entry. That said, emerging markets are proving to be a nice area of relative out performance and worth portfolio contemplation.